Companies such as Oliver Cabell are flaunting the cost breakdown of their products to appeal to millennials

NEW YORK • To make its Kennedy Weekender overnight bag, the accessories and leather goods company Oliver Cabell spends US$16.02 (S$22) on canvas, US$11.58 on leather, US$5.68 on lining and 78 US cents on webbing.

The zipper costs US$4.27.

In total - including manufacturing, transit, duties and other expenses - the company spends US$110.35 to create the bag which it sells online for US$285.

And while most retailers keep such details opaque so that consumers will not know how big a mark-up they are charging, Oliver Cabell flaunts the cost breakdown of its products on its website.

Get The Straits Times newsletters in your inbox

This practice, known as transparent pricing, has been gaining hold among a select group of retailers which say it appeals in particular to millennials.

"Price transparency is crucial for clients who want to be sure that everyone was paid a fair wage along the way," said Mr Bruno Pieters, founder of Honest By, a clothing and accessories retailer in Belgium.

Employing the slogan "the world's first 100 per cent transparent company", it uses a price breakdown so extensive it includes the cost of size labels and hang tags.

I saw how the companies I worked for and others would move their production from Belgium or France to Vietnam or India, but would still be asking the same prices they asked before.

MR BRUNO PIETERS, founder of Honest By, a clothing and accessories retailer in Belgium, on his decision to present the prices of his products in a transparent manner

For instance, a black organic cotton print T-shirt, advertised as vegan, organic and skin-friendly, costs about US$110 (in the European Union, a price that includes the value-added tax) or US$90 (elsewhere, without that tax).

Mr Pieters said his decision to present his products this way stemmed from his time at a major fashion house.

"I saw how the companies I worked for and others would move their production from Belgium or France to Vietnam or India, but would still be asking the same prices they asked before," he added.

Other ethical concerns, such as fair wages, also informed his decision.

Mr Scott Gabrielson, who got the idea for his accessories and leather goods company Oliver Cabell, while working on his MBA at Oxford, said the ability to sell directly to consumers online influenced his decision to use transparent pricing.

He wanted to show that, by eliminating brick-and-mortar and other built-in costs, clothing sellers could save shoppers money.

One of his biggest challenges, however, has been convincing shoppers that the goods he sells are worth the cost, particularly when all that they have to go on are the pictures on his website.

Such scepticism may be on the wane, however, as consumers migrate online from retail stores.

Ms Natalie Grillon, founder of Project Just, which collects ethics and sustainability data on fashion brands, believes transparent pricing would give a leg up to retailers.

"We've lost the understanding of the value of the clothes we buy.

"Pricing transparency and stories behind the scenes help the shopper navigate the decision to pay for a more expensive product."

For some clothing companies, price transparency is used as a one- off or occasional tool.

Take, for example, New York- based menswear brand Noah, which tries to merge "the rebellious vitality of skate, surf and music cultures with an innovative appreciation of classic menswear".

Mr Brendon Babenzian, its owner, said consumers had got "used to paying inexpensive prices for things".

To help them understand the industry, he broke down the production and pricing details of a signature product, his two-toned parka.

The parka retails for US$448. The zippers, Velcro, snaps and drawcords come from Italy and cost an aggregate of US$16.88. Mesh from Japan costs US$2.18 a jacket.

A custom label is 75 US cents and sewing and assembly are US$122.29.

Mr Babenzian's aim is to open shoppers' eyes to the true cost of making quality clothes.

He plans to use cost breakdowns strategically, in cases when a product might appear to be costlier than a customer might expect.

Still, some shoppers do not care about the pricing breakdown.

Ms Page Perrault, 28, a banking analyst based in Athens, Georgia, likes to see why brands price items the way they do.

But she does not consider the practice a driving factor in her purchases. "It's nice to have, but it's not required," she said.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on July 06, 2017, with the headline 'Revealing the true cost of clothes'. Print Edition | Subscribe

Follow ST

The Straits Times

We have been experiencing some problems with subscriber log-ins and apologise for the inconvenience caused. Until we resolve the issues, subscribers need not log in to access ST Digital articles. But a log-in is still required for our PDFs.